Monthly Archives: October 2015

Model Notes: The gold model is short and the gold market broke down, with the GLD closing near the previous exit TSP. So the yellow metal model is in good shape. Bonds (the featured October market) proved to have a more challenging time. The TLO didn’t drop after the late-Sept sell and the only other action was a late-Oct buy that was not terrible (TSP was on a down day for the entry and the final trading day was positive) but not profitable on the outset. I will do a post-mortem shortly. I plan to do more model work in this area and have scheduled a rematch for March.

Featured market rotation: Bonds for October (waving goodbye) VIX for November (looking for a starting signal now). Brazilian real for December. S&P for January. Gold is currently non-rotational.

Note: TSP is calculated by using the closing price of the trading day after the signal day.

Nonlinear Trading Themes:

Gold: The yellow metal broke below the 111 (GLD basis) support level. Next stop 107? The model gold portfolio is still short.

Bonds (Oct. Featured Market): We are waving good-bye to this area. I had hoped for more signal activity. I plan to visit this area (with model enhancements) in rematch for March.

VIX (Nov. Featured Market): I spent almost two weeks at the end of October to get an initial entry signal but no luck. VIX starts November flat. On the plus side, the implication is that stocks will continue to rise.

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Model Notes: The bond model changed signal position to “up” today. This comes after being short for the entire month of October. From a model perspective the, this market has been in a tight trading range and thus tough to call a direction. On the plus side, the model avoided the pitfall of a series of whipsaws that plagues many linear trend following models in these situation. So no: chop, chop, chop. The gold model is still short and waiting for more substantial selloff to develop.

Featured market rotation: Bonds for October (waiving goodbye soon) VIX for November (looking for a starting signal now). Brazilian real for December. Gold is currently non-rotational.

Note: TSP is calculated by using the closing price of the trading day after the signal day.

Nonlinear Trading Themes:

Gold: The yellow metal has been selling off after the 10/20 sell signal but without much gusto. Support is currently at 111 (GLD basis). The current pause on the downside does not look like a classic technical bottom. The model is indicating lower prices. The model gold portfolio is still short.

Bonds (Oct. Featured Market): The TLO model flipped to “buy” today. The model has been a staunch supporter of a Fed move before the end of the year. But now this has changed. If you look at the dominant monthly trend (bottoms on 10/8, 10/20 and 10/23), it is now pointing upward. So the Fed holds its fire a little longer. What will the country do? The model bond portfolio is now bullish.

VIX (Nov. Featured Market) Trading Signals (no chart shown yet): I starting looking for an entry signal recently and simply got non-trending readings. This has been positive for stocks. So far, no buy signal. Stocks should continue up for now. I am still searching for an entry signal.

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Model Notes: The gold model is changing its position from flat to short. Prices are pretty lofty and the odds seem to favor a pullback of some sort. The bond model (as shown on the TLO) is anticipating lower prices. The upcoming feature market for November is the $VIX. Going forward, I am looking for a pre-November entry to get set up for the action. Currently, we have volatility as flat (which probably is positive for the stock market).

Featured market rotation: Bonds for October. VIX for November. Brazilian real for December. Gold is currently non-rotational.

Note: TSP is calculated by using the closing price of the trading day after the signal day.

Nonlinear Trading Themes:

Gold: The yellow metal took the moonshot and is now pausing. The models issued an outright ‘sell short’ signal tonight. The recent jump has put this market in overbought territory so the change of position feels good. There are several upcoming issues that the gold bulls will have to contend with. US largecaps are pushing higher, an inter-market relationship that is not going to bring gold buyers to the table. The other issue is the looming Fed hike. The models are forecasting higher rates, another strike against the gold bulls. The model gold portfolio is now short.

Bonds (Oct. Featured Market): The TLO is starting to feel heavy here with a trading high on Oct 2 and a lower high on Oct 14. A close below the 50-day average may be enough to start the bond bears rolling. The model bond portfolio remains bearish.

VIX (Nov. Featured Market) Trading Signals (no chart shown yet): I am looking for a signal to get this set up for trading analysis in November. The most recent signal is a resounding ‘flat’. So I am still searching for a future move to exploit.

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With deflationary forces becoming more dominant, top level, successful, investment strategies are going to become more reliant on ‘activity’ (trading). Check out ConquerTheMummy.com for trading signals that help!

Model Notes: Models are being challenged this week. On the gold front, we closed out a good trade, but the market soared in the aftermath. The simple truism is that you can’t make every nickel. Next we go to bonds. The 9/24 sell signal is still the current position, however bonds continue to creep against it. And the model is not changing. We are expecting a hike of some sort.

Featured market rotation: US Dollar for September (nearing the end) and Bonds for October. VIX for November. Brazilian real for December. Gold is currently non-rotational.

Note: TSP is calculated by using the close of the trading day after the signal day.

Nonlinear Trading Themes:

Gold: The yellow metal (GLD basis) took a moonshot, as US/Russian tensions in the Syria have pretty much chased the sellers away. Leaving money on the table is not a great feeling, but much better to make some and bail than to be caught on the wrong side. So what now? Wait for the model reset and to identify the next trade. The model gold portfolio remains flat.

Bonds (Oct Featured Market): TLO will not give up the ghost here and drop and this week saw bonds creep higher. There is a lot of speculation as to what the Fed will or will not do. The models do not see a lot of upside here. The model bond portfolio remains bearish.

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Model Notes: The gold model is doing well. The recent exit was well north of the entry (TSP to TSP). Following the exit, GLD moved up but there is significant resistance at these levels. Bonds are more problematical. The 9/24 signal (and the resulting poor TSP) has spent 2 weeks “out of the money.” On the plus side, the Oct 2nd downside reversal has capped the rally (remember we are short). The signal still points down, hence the “waiting game” comment.

Featured market rotation: US Dollar for September (nearing the end) and Bonds for October. VIX for November. Brazilian real for December. Gold is currently non-rotational.

Note: TSP is calculated by using the close of the trading day after the signal day.

Nonlinear Trading Themes:

Gold: The yellow metal (GLD basis) is now near a multi-month high not seen since the dark days of the Chinese (followed by the S&P 500) stock market sell-off. But while gold is at these levels again, the S&P 500 is making gains to retrace to pre-crash levels. So being flat is not an unpleasant situation. The model gold portfolio remains flat.

Bonds (Oct Featured Market): The TLO is higher than the 9/24 TSP level, but not really running away. The model sees higher rates (lower bonds). A logic walk-through goes like this: The Fed wants to do the lone rate hike but has been stymied by recent bad jobs data and “advice” from both the World and IMF (peer pressure). The Fed wants to do the hike as the endless speculation on whether they do it or not has become counter-productive (they promised to do one soon). The recent rally in stocks (aka a prominent leading indicator of the economy) will give them the cover to act. The model bond portfolio remains bearish.

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Model Notes: The gold model did a pretty good job over the last month. The entry TSP of 106.13 (GLD basis) was at the low end of the 30-day trading range. We won’t know what the exit long TSP is until after the close of tomorrow, but if it is near the 2 previous closing prices, it will be near the high end of the same 30-day range. This is very good performance.

Featured market rotation: US Dollar for September (nearing the end) and Bonds for October. Stocks for November. Brazilian real for December. Gold is currently non-rotational.

Note: TSP is calculated by using the close of the trading day after the signal day.

Nonlinear Trading Themes:

Gold: Poor jobs data really change the gold trading dynamic, sending the yellow metal higher. Today’s exit long signal is a recognition that gold is becoming more vulnerable to a retrenchment. Especially, if stocks keep the rally going. The model gold portfolio is now flat.

Bonds (Oct Featured Market): The 9/24 sell signal is shackled with a less-than-optimal TSP. Nevertheless, the models see more downside ahead. If stocks continue to pick up the tail wind, the Fed may be emboldened to squeeze out a hike this year after all. The IMF disagrees, as Jose Vinals (Monetary and Capital Markets Director), advised against a Fed nudge. Oh well, as the saying goes, those that can “do”, and those that can’t give advice to the Fed. The TLO has been trading below the 72 resistance level (TLO basis) for several days now. The model bond portfolio remains bearish.

I am now offering a more a la carte fee system for CTM research. Purchasers can now mix and match signals on various symbols. Currently available. Click on the ‘Fees’ tab for more info.

With deflationary forces becoming more dominant, top level, successful, investment strategies are going to become more reliant on ‘activity’ (trading). Check out ConquerTheMummy.com for trading signals that help!

Model Notes: This is the last chart for the US dollar (Sept featured market). I will post a post-mortem shortly under the “Forex Trading’ tab. This was a positive round for nonlinear trading analysis and the CTM website. The gold market failed to hold support this week. This is a concern as the models have this market as oversold. Still the TSP for the long trade is lower than today’s close (meaning the position is positive).

Featured market rotation: US Dollar for September (nearing the end) and Bonds for October. Japanese yen for November. Brazilian real for December. Gold is currently non-rotational.

Gold: GLD pierced the 107.50 support level this week (Wed) but on the plus side, Thursday’s action did not exhibit much follow-through. Nonlinear readings are still on the oversold side of the issue. Friday may prove to be a setup for a bounce. The model gold portfolio is still long.

US Dollar (Sept Featured Market): Waiving goodbye to the greenback (for now)!

Bonds (Oct Featured Market): The sell signal on 9/24 wasn’t bad but the TSP (70.50) is going to be an albatross. The market is pressing the signal. The market is trying to gauge if the Fed is going to act or not. Yellan seemed to indicate a tightening this year, but who knows if the Fed can do it if the pointy-head economists from Europe start to criticize. The volatility of equities is keeping the bond sellers off balance. Anyway, we will see if 72 on the TLO is resistance point. The model bond portfolio remains bearish.

I am now offering a more a la carte fee system for CTM research. Purchasers can now mix and match signals on various symbols. Currently available. Click on the ‘Fees’ tab for more info.

With deflationary forces becoming more dominant, top level, successful, investment strategies are going to become more reliant on ‘activity’ (trading). Check out ConquerTheMummy.com for trading signals that help!